In a recent Computer Trade Only magazine (7th March 2006), there's an article called "adding value to open source". In there, Ian Lynch points out some practical and simple ideas for OEM (Original Equipment Manufacturers) to add value to their computers by bundling open source software rather than closed and proprietary software.
As prices of computers dipped south, the percentage of a computer's price dedicated to paying software licenses rose dramatically. For a £2000 computer, it might account for 3% of the total price but nearly 25% for a £200 computer. The bulk of it is eaten away by the operating system, Windows in most cases. This is probably why many smaller companies are feeling the heat and selling their computers without operating system and indeed without any software, in order to cut prices.
So why not offer open source software - which is intrinsically free - with computers instead and pocket the money. Ian points to three ways in which OEM suppliers can use open source software to add value for their hardware. Firstly, by replacing Windows applications - including the operating system – altogether, secondly, installing Windows and Linux side by side and allowing the user to decide what they want and lastly, get a Live Linux CD bundled with the package. A Live Linux CD is a fully working Linux environment running from a CDROM rather than from the hard disk drive.
There's actually a fourth way which is not mentioned in the article, which is actually providing Linux software support and offering it as a paid service. This is where the majority of open source companies - from IBM to Red Hat - make bucket loads of money. The software is free, the service is not. And that's a great idea.